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How do immigrants create jobs for natives?

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LandJ posted on Sat, Dec 22 2012 1:43 PM


A. In general, libertarians accept that immigration (related to work and not welfare), contribute to the economic growth of a country. It is said that they do not steal jobs, on the contrary they create jobs and in particular, jobs for native workers. 
B. Also, it is believed that the jobs for natives that immigrants create, are highly paid jobs. 
Please, can you explain to me with some examples a more detailed process that illustrates the 2 above statements? To be more specific, here in Greece during the crisis, illegal immigrants who work are the scapegoats. In most cases, they work as farm workers, as employees in gas stations & car washers, as unloaders in super-markets. 
1. Could you explain to me the process using the Greek examples I said above, please? 
How low-paid farm workers, gas stations-car washers and supermarket immigrant employees, create jobs with higher salaries for natives?
2. The jobs that these immigrants create for natives, are in the same businesses?In the same industry?In different idustries?
Please, help me figure this out. Thank you...

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Suggested by Smiling Dave

Dudes, you're overcomplicating things.

Working immigrants are imports on human capital, labor factors.

These imports happen because there is demand for these kinds of capital.

Of course if you own capital in the industry that is importing capital, the new capital is going to hurt you.

If you're a farm worker and you have to compete with mexican peasants willing to outwork you and outprice you, you're pretty much fucked.

Just like the domestic toy maker companies that were obliterated by chinese imports.

You may feel like converting your capital to some other industry, given the competition from imports.

Your ability to do so will depend on circumstances.

But generally the effectiveness of the new human capital imported is generating prosperity and part of this prosperity is being saved as capital and being used to open new oportunities in other sectors, that you may seize.

"Blood alone moves the wheels of history" - Dwight Schrute
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Jargon replied on Thu, Dec 27 2012 6:19 PM

There are two issues here. First, does there exist a right of exclusion of immigrants? I wasn't discussing that, nor was the OP. Similarly, I wasn't talking about what someones stance should be on immigration, and neither was the OP.
Hey Dave,
Sorry for the late response. I'll get into this further down in my post.
Second, what are the economic effects of immigration? And of course, the answer is that in a free market everyone will be better off economically from an increase in the labor supply, just as they would be by the increase of any factor of production. If we found more oil, or gold, or any other commodity, we would be wealthier. Same with more labor. My earlier posts were elaborating on that point.
An increase in the labor supply for whom? All that happened is that some people crossed a border into a different country. But the country of their origin and the country of their destination are in relations of free trade (kind of). To be honest I'm not well-read on the specifics of NAFTA and it may not be free trade at all, but as far as I gather, it is free trade but with built in contracts and 'rationalizations' of trade. But the point is that, if NAFTA is free-trade, there is no net gain or loss of labor when feet cross borders, only a reallocation of labor from one firm to another.
The section I alluded to in Rothbard's article is not about protectionism, nor about immigration, but about how wages are determined. I cited it in defense of my thesis that employers don't wait around hoping for a bargain, because there are no bargains. People are paid what they are worth to the employer. He has to pay that, because if he doesn't, someone else will. It's a praxeological argument [= uses deductive reasoning].
Ok, an employer pays his employees what they are worth to him. But an influx of uneducated people into a region will certainly lower the market wage for unskilled labor. Perhaps the employer cannot pay new Mexican immigrants below the market wage. Indeed he can't. But the influx of immigrants depresses the market wage by increasing the supply of labor. So yes, an employer will wait for immigrants to cross the border because it would depress unskilled wages in general.
And yes it may be bid away from the locality to distant higher wages, but it is much more likely that due to the insufficient funds, information, and appetite for risk of most immigrants that they won't move very far from the border.
I didn't see where you refuted the praxeological argument. You only addressed the example Block gave. The point of his example was not that it would happen every time [although Mexican workers seem to have found their way to every state in the union], but rather exactly the opposite. He wanted to show the power of the economic force he was describing, that extended its long arm half way across the country. Obviously, you don't need Minnesota to raise wages. It will happen locally as well.
I'm not disputing that labor is a price like any other and that over time supply approaches equilibrium with demand. But how could employers in Minnesota have been able to lure workers away from border states if the wages there were at the market level due to the bidding of competitors? This situation to me seems analagous to those who advance the neutrality of money. After the new money has worked its way through the economy, its purchasing power will be equal for all recipients. But in the meantime, its purchasing power is not equal for all recipients as price change is enacted by the exploitation of those purchasing power discrepancies. So too is it with labor: as new labor crosses the border, there is a glut of unskilled labor in border states, depressing unskilled wages, which is eventually worked out by the price action of employers from border states and non-border states bidding up wages. But in the meantime, unskilled wages for the 'first recipients' of immigrants will be like the first recipients of newly printed bills: lower than the market wage that the new supply of workers demands, and yet lower than the market wage that the old supply of workers demanded.
As for why ignore the govts fight for diversity [although this fight is only for the benefit of the voting class. You don't see people fighting for inclusion of Hottentots and Mauris in the diversity mix, only women and blacks and Hispanics and other groups with a large voting block], the answer is simple. First , it is important to understand the nature of an economy absent govt meddling.
Point taken.
Second, this diversity scam only exists in countries with a large minority who has voting rights. Not every country is like that. Very few are. The OP mentioned Greece. Do you think there is a diversity movement in Greece? Or Russia? Or Japan? Or China? Or anywhere in Europe or Asia?
I can see your point with Asia and Russia, but Europe most definitely has the diversity fever. Sweden offers apologies to the muslim world about 'Draw Muhammed Day', they call themselves a multicultural society, men are forbidden from peeing standing up and there is Hatespeech legislation. In the UK you can also go to jail for saying something non-PC. Actually I'm pretty sure that many European countries will jail you for saying something non-PC. They have a different more severe flavor of diversity fever. Just take a look at the battles between rightist political parties and the mainstream in Europe to see.
On Exclusion: The reason that I felt I should include that bit about the right of exclusion is thus: our economic conclusions are necessarily based on the legal system at hand. Regular economics lies on a foundation of semi-private property mixed with politics, Mises' analysis of socialist calculation rests on a fundament of total state property. If we are analyzing immigration in a Libertarian context and also supposing unrestricted immigration, I believe we are contradicting ourselves. Removing law and the decisions that people make within their legal authority will make our economic analyses meaningless. So I introduced the right of exclusion in private property to set the precedent for the economic outcomes which follow therefrom. You were saying that we ought to see how things turn out sans government interference. The legal precedent determines the market data on which employers and employees act. You were supposing one legal precedent and its concordant market data, and I was introducing another legal precedent. 
Land & Liberty

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But how could employers in Minnesota have been able to lure workers away from border states if the wages there were at the market level due to the bidding of competitors?

Because the local wage in California did not take into account the need for labor in Minnesota.

Going over your reply, I don't think I disagree with any of it.

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